Scott Van Dyke v. Forest Hunter Smith

Affirmed and Memorandum Opinion filed July 29, 2010.

In The

Fourteenth Court of Appeals

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NO. 14-09-00900-CV

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Scott Van Dyke, Appellant

V.

Forest Hunter Smith, Appellee

On Appeal from the 133rd District Court

Harris County, Texas

Trial Court Cause No. 2004-48332

MEMORANDUM OPINION

            Scott Van Dyke appeals from a turnover order issued in enforcement of a prior judgment favoring Forest Hunter Smith.  On appeal, Van Dyke contends that the trial court erred in ordering the turnover of his property because he is not a judgment debtor under the prior judgment.  Van Dyke further moves this court to issue a nunc pro tunc judgment correcting clerical errors that he contends exist in this court’s earlier judgment affirming the underlying judgment of the trial court.  We affirm the trial court’s turnover order and overrule Van Dyke’s motion.

Background

Van Dyke is the majority owner of two corporations, Anglo-Dutch Petroleum and Anglo-Dutch (Tenge) (collectively, “Anglo-Dutch”), formed for the purpose of developing an oil and gas field in Kazakhastan.  In 1997, Anglo-Dutch entered into a letter of intent with Halliburton concerning exploration of the field.  However, in 2000, Anglo-Dutch sued Halliburton over the project.  In order to finance the lawsuit, Anglo-Dutch entered into several Claims Investment Agreements, through which investors contributed funds in return for a share of the potential recovery. Smith signed two of these agreements and invested a total of $50,000.  In return, Anglo-Dutch agreed to pay Smith, out of any litigation recovery, his initial $50,000, eighty-five percent of $50,000, and then an additional eighty-five percent for each year that passed from the date of the agreement to the time of the recovery.

Ultimately, Anglo-Dutch was awarded $106 million in the lawsuit, and Anglo-Dutch and Halliburton entered into a confidential settlement agreement.  Before this settlement, however, Anglo-Dutch attempted to negotiate a reduced payout to its litigation investors.  Although some investors agreed, Smith and others did not.  Smith subsequently sued Anglo-Dutch and Van Dyke.  In the lawsuit, he alleged fraud, breach of fiduciary duty, conversion, and breach of contract.  After a bench trial, the trial court imposed against Anglo-Dutch and Van Dyke:  actual damages of $151,876, exemplary damages of $303,752, and attorney’s fees of $60,000.

Anglo-Dutch and Van Dyke appealed.  In our prior opinion, this court explained that the trial court found against both Anglo-Dutch and Van Dyke on each cause of action, i.e., fraud, breach of fiduciary duty, conversion, and breach of contract.  We further held that there was no evidence to support the fraud, breach of fiduciary duty, or conversion findings, and, thus, no basis for the award of exemplary damages.  However, we also overruled Anglo-Dutch and Van Dyke’s challenges to the breach of contract finding.  Consequently, we modified the trial court’s judgment to eliminate the award of exemplary damages and affirmed the judgment as so modified.  Our judgment and mandate were in accord with the holdings in the opinion:  deleting the exemplary damages award and affirming the remainder of the judgment, including actual damages and attorney’s fees.  The Texas Supreme Court subsequently denied competing petitions for review.

As part of his efforts to collect on the judgment, Smith applied for a turnover order pursuant to section 31.002 of the Texas Civil Practice and Remedies Code.  Tex. Civ. Prac. & Rem. Code § 31.002.  Specifically, Smith requested that the court order Anglo-Dutch and Van Dyke to “collectively ‘turn over’ and pay into the Court’s Registry sufficient non-exempt property in the form of cash, funds and other monies to satisfy fully the Final Judgment (and any additional post-judgment interest).”  At one point during the proceedings below, Van Dyke represented to the court that “he ha[d] access to at least $125,000 in cash to satisfy any turnover order that might be entered in this case.”  On September 25, 2009, the court granted Smith’s application and issued a Turnover Order requiring Van Dyke to pay into the court’s registry $118,540.38.

Judgment Debtor

In a single issue on appeal, Van Dyke contends that the trial court erred in entering the turnover order against him because he was not a judgment debtor under the judgment in the underlying case.  Section 31.002 of the Civil Practice and Remedies Code authorizes courts to order judgment debtors to turn over nonexempt property in satisfaction of a judgment.  Tex. Civ. Prac. & Rem. Code § 31.002(b).  We may review a turnover order on appeal and utilize an abuse-of-discretion standard in doing so.  Tanner v. McCarthy, 274 S.W.3d 311, 320 (Tex. App.—Houston [1st Dist.] 2008, no pet.).

If Van Dyke was not a judgment debtor, then the section cannot apply to him.  See Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 227 (Tex. 1991).  However, Van Dyke is indeed a judgment debtor. The trial court’s judgment imposed actual damages, exemplary damages, and attorney’s fees against Van Dyke; we deleted the exemplary damages but affirmed the remainder of the judgment; the Texas Supreme Court denied the petitions for review.  Thus, the final judgment, as modified and affirmed by this court, assessed actual damages against Van Dyke.

Nonetheless, Van Dyke argues that the trial court should have rejected the application for a turnover order because in the trial court’s original findings of fact and conclusions of law it found that only Anglo-Dutch, and not Van Dyke, was liable for breach of contract, the only cause of action to survive on appeal.  In his appellate briefing, Smith disputes this reading of the findings of fact and conclusions of law, arguing instead that the trial court found Van Dyke liable on all of the causes of action.[1] It does not matter, however, who is correct in this regard.  In our prior opinion, judgment, and mandate, this court affirmed the entry of actual damages against Van Dyke.  If Van Dyke had wanted to assert that our judgment erroneously affirmed actual damages against him, he should have done so before he exhausted the appeals process regarding that judgment and before mandate was issued.  See In re Long, 984 S.W.2d 623, 626 (Tex. 1999) (orig. proceeding) (per curiam) (explaining that an appeal is not “exhausted” or “final” until the court of appeals issues its mandate); see also Edwards Aquifer Auth. v. Chem. Lime, Ltd., 291 S.W.3d 392, 413-16 (Tex. 2009) (Willett, J., concurring) (discussing finality of appellate decisions and noting that “the period between judgment and mandate affords the court the opportunity to correct an appellate judgment before commanding its execution and enforcement in the lower court.” [internal quotation marks omitted]).  Furthermore, the trial court had no authority to disregard our judgment.  See Tex. R. App. P. 51.1(b) (“When the trial court clerk receives the mandate, the appellate court’s judgment must be enforced.”); Tex. Parks & Wildlife Dept. v. Dearing, 240 S.W.3d 330, 347 (Tex. App.—Austin 2007, pet. denied) (“Upon receiving the appellate court’s mandate, the lower court has a mandatory, ministerial duty to enforce the appellate court’s judgment.  It has no discretion to review, interpret, or enforce the mandate but, instead, must carry out the mandate.”).  Thus, the trial court did not err in issuing the turnover order based on our prior judgment.  We overrule Van Dyke’s sole issue.

Nunc Pro Tunc

In the alternative, Van Dyke moves this court to issue a judgment nunc pro tunc correcting what he calls a “clerical error” that this court allegedly made in its prior judgment.  Nunc pro tunc judgments may issue to correct clerical mistakes in a judgment, but they cannot be used to correct judicial errors.  See, e.g., B.Z.B., Inc. v. Clark, 273 S.W.3d 899, 903 (Tex. App.—Houston [14th Dist.] 2008, no pet.).  To be clerical in nature, an error cannot be the result of judicial reasoning, evidence, or determination.  Id.  Typical clerical errors that can be corrected by nunc pro tunc judgments include errors in the date of judgment, a party’s name, and the transcription of numbers.  In re Broussard, 112 S.W.3d 827, 833 (Tex. App.—Houston [14th Dist.] 2003, orig. proceeding) (citing cases).  Clerical errors also include instances where the record clearly shows that the judgment entered did not reflect the judgment rendered.  Id. A judicial error arises from a mistake of law or fact that requires judicial reasoning to correct.  B.Z.B., 273 S.W.3d at 903.

Here, Van Dyke is asserting that our prior judgment erroneously affirmed actual damages against him based on a breach of contract cause of action.  He premises this assertion on his further argument that in its findings of fact and conclusions of law, the trial court did not find him liable on the breach of contract cause of action.  In our prior opinion, we unequivocally stated that the trial court found both Anglo-Dutch and Van Dyke liable on each cause of action, including breach of contract.  We then overruled Anglo-Dutch and Van Dyke’s challenge to that finding.  Having done so, we affirmed the award of actual damages against both Anglo-Dutch and Van Dyke.  It is clear from the discussion in the opinion that the judgment properly reflected the result reached by the court.  In other words, there was no clerical error in the drafting of the judgment.  Van Dyke’s assertions allege a mistake of law or fact that would require judicial reasoning to analyze.  Accordingly, we overrule Van Dyke’s motion for a judgment nunc pro tunc.  B.Z.B., 273 S.W.3d at 903; see also In re Broussard, 112 S.W.3d at 833 (finding trial court’s entry of nunc pro tunc judgment was erroneous because it did not merely correct clerical error but imposed new obligation on party).

We affirm the trial court’s turnover order and overrule Van Dyke’s motion.

                                                                        /s/        Adele Hedges

                                                                                    Chief Justice

Panel consists of Chief Justice Hedges and Justices Yates and Boyce.

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[1] As mentioned above, in our prior opinion we stated that the trial court found both Anglo-Dutch and Van Dyke liable on each cause of action, including breach of contract.